Commercial Bank of Dubai has issued additional, non-callable, first-tier permanent bonds with a maturity of six years at a value of $ 600 million at an interest rate of 6%, which is the lowest interest rate from a bank issuer in Dubai so far as additional bonds for the first tier of capital in accordance with the requirements of Basel 3. The issuance, which is an introductory level 1 issue for the bank, also represents its return to the capital markets since the bond offering in 2015. It is the second tier 1 issue from the GCC countries to include a nominal call feature after six months.
Standard Chartered Bank and Citibank acted as joint global structuring agents and coordinators, while Standard Chartered Bank, Citibank, Barclays, Emirates NBD, First Abu Dhabi Bank and Nomura acted as joint lead managers of bonds. The bonds will be listed on Euronext Dublin and Nasdaq Dubai.
On October 12, 2020, Commercial Bank of Dubai announced a new mandate for S-Regulation for additional permanent non-callable Tier 1 bonds with a six-year maturity. The issuance was well received by investors from the Middle East, North Africa, Europe and Asia. The presentations were widely welcomed as key points highlighted to investors included Commercial Bank of Dubai’s strong creditworthiness, stable ownership and stable growth accompanied by strong financial performance.
These factors, in addition to other things, formed an attractive factor to attract high-quality applications with strong participation from more than a hundred investors, despite the volatile conditions and the great challenges in the global financial markets, as Commercial Bank of Dubai benefited from high-quality requests, which enabled it to review and reduce prices. The yield is set at 6%, for a $ 600 million issue. The rate is the lowest interest rate from a bank issuer in Dubai so far, and compares favorably with recent issues in the region. The issuance closed on October 21st and demand was well diversified with 61% of the allowance earmarked for investors from the MENA region, 24% for Europe and 13% for investors from Asia.
Dr. Bernd Van Linder, Chief Executive Officer, said: “We are pleased with the success of the issuance, which reflects the solidity of the Bank’s strategic vision and the firm commitment to implementing the strategies developed over the years. This release will enhance and provide additional support for local businesses now and in the future. We would also like to thank all the parties that participated in this issue, especially the investors who still place great confidence in Commercial Bank of Dubai.
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